UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934
                     For the fiscal year ended May 31, 2006

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934
                For the transition period from ________ to ________

                         Commission file number 0-17978

                              EDD HELMS GROUP, INC.
                 (Name of small business issuer in its charter)

             Florida                                     59-2605868
     (State or other jurisdiction                     (I.R.S. Employer
      of incorporation or origination)              Identification No.)

   17850 N.E. 5th Avenue, Miami, Florida                  33162-1008
  (Address of principal executive offices)                (Zip Code)

Issuer's telephone number (305) 653-2520

Securities registered under Section 12(b) of the Exchange Act:

Title of each class                 Name of each exchange on which registered

       None                                      None

Securities registered under Section 12(g) of the Exchange Act:

                          COMMON STOCK, $.01 Par Value
                                (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [ ] Yes [X] No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

The issuer's revenues for its most recent fiscal year were $21,205,352.

The aggregate market value of the voting and non voting common equity held by
non-affiliates  computed by reference to the average bid and asked  price of
such  common  equity as of August 31,  2006,  was  $416,316  (1,125,178
shares at an average bid price of $.37 per share).

There were 12,574,896 shares outstanding of the issuer's common stock, $.01 par
value, as of August 31, 2006.
<PAGE>


                        EDD HELMS GROUP, INC. AND SUBSIDIARIES
                                   FORM 10-KSB
                                TABLE OF CONTENTS

PART I                                                                     PAGE
--------                                                                   ----
  Item 1.   Description of Business.                                          3
  Item 2.   Description of Property.                                          9
  Item 3.   Legal Proceedings.                                               10
  Item 4.   Submission of Matters to a Vote of Security Holders.             10

PART II
--------
  Item 5.   Market for Common Equity and Related Stockholder Matters.        11
  Item 6.   Management's Discussion and Analysis or Plan of Operation.       11
  Item 7.   Financial Statements.                                            15
  Item 8.   Change in and Disagreements With Accountants on Accounting and
              Financial Disclosure.                                          32
  Item 8A.  Controls and Procedures.                                         32

PART III
--------
  Item 9.   Directors, Executive Officers, Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act.             32
  Item 10.  Executive Compensation.                                          36
  Item 11.  Security Ownership of Certain Beneficial Owners and Management
                    and Related Stockholder Matters.                         37

  Item 12.  Certain Relationships and Related Transactions.                  38
  Item 13.  Exhibits.                                                        39
  Item 14.  Principal Accountant Fees and Services.                          39






<PAGE>

Forward-Looking Information

Certain information contained or incorporated by reference in this Annual Report
on Form 10KSB is forward looking in nature. All statements included or
incorporated by reference in this Annual Report on Form 10-KSB or made by
management of Edd Helms Group, Inc. and its subsidiaries, other than statements
of historical fact, are forward-looking statements. Examples of forward-looking
statements include statements regarding Edd Helms Group, Inc.'s future financial
results, operating results, business strategies, projected costs, products,
competitive positions and plans, and objectives of management for future
operations. In some cases, forward-looking statements can be identified by
terminology such as "may", "will", "should", "would", "expects", "plans",
"anticipates", "believes", "estimates", "predicts", "potential", "continue", or
the negative of these terms or other comparable terminology. These statements by
their nature involve substantial risks and uncertainties, and actual results may
differ materially depending on a variety of factors, many of which are not
within our control. These factors include, but are not limited to:

  o Economic conditions generally and in the industries in which our
      customers participate
  o Competition within our industry, including:
      o Competition from much larger competitors
      o Price increases or supply limitations for components purchased by us
          and delays, reductions, or cancellations of orders previously placed
          with and by us, or,
      o Cancellations of orders previously placed with and by us.

                                     PART I
Terms used in this report:
HVAC       Heating, Ventilation, Air Conditioning
CCTV       Closed Circuit Television
ABYC       American Boating and Yachting Council
CFC's      ChloroFlouroCarbon
UPS        Uninterruptible Power Supply (a sophisticated battery)
NASDAQ     National Association of Securities Dealers Automated Quotation System
Gigabit    1,000,000 bits of computer information
Clean-room Sterile or semi-sterile manufacturing environment

Item 1. Description of Business.

We are a Florida Corporation, organized in 1985 and originally incorporated
under the name of Hotelecopy, Inc. In August of 1999, Hotelecopy, Inc. merged
with Edd Helms, Inc. a Florida corporation and changed its name to Edd Helms
Group, Inc. We presently have three wholly-owned Florida corporation
subsidiaries:

          Edd Helms Air Conditioning, Inc.,
          Edd Helms Marine Air Conditioning and Refrigeration, LLC, and
          DataTelcom, Inc.

Edd Helms Group, Inc., is a diversified services company with specific
disciplines of service in the areas of:

          Electrical and Data Communications,
             Trade Shows & Exhibition Services,
          Air Conditioning, Refrigeration and Mechanical,
          Marine Air Conditioning and Refrigeration, and
          Wireless and Cellular Towers.



                                       2
<PAGE>

                                     PART I

Item 1.  Description of Business

The focus of our business is performing service and retrofit work for
commercial, residential, and marine customers. We regularly perform add on, and
replacement design-build projects. We service the convention and exhibition
services industry with our skilled labor force and a large inventory of
temporary electrical systems. We provide structural, radio frequency, power,
heating, ventilation and air Conditioning services to the wireless cellular
tower industry. We employ one hundred forty three employees and operate
approximately seventy service vehicles, each with wireless communications for
peak efficiency in providing our services to our customer base.

Our internal information technologies include multiple rack mounted main
computer servers and a combination of traditional, thin client, and wireless
workstations. All software applications are secure and accessed by our employees
using Citrix Presentation Server (TM)and Citrix Metaframe (TM) software from any
inside or outside location where internet access is available. These secure
computer systems have built-in redundancy, nightly automated data backup, and
are powered by uninterruptible power systems and emergency generators in the
event of power outages. Our management software is specifically designed for the
service industry and related accounting functions. We use specialized service
software to log service orders, schedule service calls, identify and ready the
necessary repair parts or equipment, track the work order, and provide
information for communication with the service technicians and customers. Our
secure records databases combined with our secure online electronic image
storage and retrieval system from Docstar (TM)allows our employees to quickly
locate desired documents such as invoices, checks, correspondence or drawings
using simple or complex keyword searches.

We are committed to providing the highest level of customer service through the
development of a highly trained workforce. Prior to employment, we make an
assessment of the technical competence level of all potential new employees,
confirm background references and conduct criminal and driving record checks. In
addition, all employees are subject to drug testing. Once hired, employees are
required to complete a progressive training program to advance their technical
competencies and to ensure that they understand and follow our safety practices
and other internal policies. Both technical and customer service personnel are
given intensive training in customer communication, sales and problem-solving
skills

Our ability to employ, train and retain highly motivated service technicians to
provide quality service is a key to our continued growth while remaining
competitive in the marketplace. In order to recruit qualified individuals, we
offer continuous industry training, equipment, a safety program, excellent
benefits and career opportunities that we believe are more comprehensive than
those typically offered within the industry. We maintain good labor relations
with our employees. Management is involved in local industry associations and
participates in organized labor training programs. In those business units where
our service people are unionized, we have not experienced a strike or any
significant labor stoppage. We believe that our relationships with our employees
are satisfactory. The strength of our business rests in our reputation,
workforce and management team.

A large part of our services are provided by means of our mobile service
vehicles. These service vehicles and the licensed technicians that operate them
carry an inventory of equipment, tools, parts and supplies needed to complete
the typical variety of jobs. The technician assigned to a service call travels
to the business or residence, interviews the customer, diagnoses the problem,
presents the solution, obtains agreement from the customer, performs the work,
and often collects payment for the services provided.


                                       3
<PAGE>

We maintain a high profile advertising campaign on television, in the yellow
pages, on the internet, and on radio. We use a direct sales force to market our
services. We continue to preserve and enhance our value of the unique and
long-standing trade names and customer identification. Our logo and identifying
marks are featured on all our trucks, marketing materials, and advertisements.
All of our employees wear uniform shirts with our trade names and logos, and
display photo identification for security to each customer when they arrive.

Electrical and Data Communications

We provide these services to commercial businesses and residential customers in
both single family homes and multi-family buildings. Our electrical services
include preventive maintenance, emergency repairs, emergency generators and
replacements (in conjunction with the retrofitting or remodeling of a residence
or commercial building, or as a result of an emergency repair) of systems and
associated parts, buss duct, electrical control systems, wiring, and panels.
Because we maintain a large inventory of temporary electric cabling and
distribution systems for use in our trade show business, we have developed a
market in emergency power restoration for high rise buildings and condominiums
following electrical fires.

Due to South Florida's recent experience with Hurricanes and the devastation
they cause, we have expanded our capacity for emergency and standby electrical
generator systems. Many businesses and homes in South Florida have experienced
extended power outages lasting days or weeks following a hurricane. During the
loss of electrical power from the public utility, a customer with an emergency
generator system has the ability for their generator to automatically take over
and run either part or all electrical systems in their home or business
including central air conditioning, computer systems, hot water heaters, and
lighting. For critical facilities such as hospitals and computer data centers,
we have been installing emergency generators systems for many years. This
expansion in capacity is a result of significantly increased demand, primarily
by homeowners and small to mid-sized commercial customers.

Our data communications services primarily include the installation and
expansion of structured cabling systems consisting of computer room racks, fiber
optics cabling between these computer room racks and remote distribution racks,
and megabit or gigabit copper wiring to individual computer workstations. We are
a certified dealer for Ortronics (TM)structured cabling systems as well as some
other leading manufacturers.


Trade Shows and Exhibition Services

We provide temporary electrical services to the convention and trade show
industry. These services are generally provided in hotels, convention halls, and
temporary outside facilities. We sell our services to decorators and trade show
groups where various vendors exhibit their products and services. These trade
shows require temporary power for the use of the individual exhibitors during
these events. We install a UL approved temporary electrical distribution system
before each event, install and maintain power and outlets to each exhibitor, and
upon the event's conclusion we remove and store the temporary electrical systems
until the event or trade show for the respective group.


                                       4
<PAGE>

Edd Helms has long been a major trade show electrical provider in the South
Florida area. We have a full-time sales and marketing staff to further develop
our presence in the trade show arena. With South Florida being a major hub for
tourism, we expect our sales in the trade show and exhibition services arena to
continue to grow over the next five years. Beginning in 2002, we entered into an
agreement with a major hotel and convention facility located in Hollywood,
Florida to provide electrical services to the decorators and exhibitors at the
facility. This facility has grown into one of South Florida's top convention
facilities. We maintain a separate tradeshow office at this facility with high
speed internet allowing it to access the home office based software
applications, POS, and management systems.

The equipment required for a trade show electrical exhibition provider is
extensive. It requires continuous maintenance and annual UL safety
certification. We own a large inventory of trade show equipment that is
maintained and stored at our various facilities. We believe that this
specialized equipment has a value substantially in excess of that reflected in
our books.

We believe that our convention trade show and exhibition services division would
benefit from acquisition of other trade show service providers. We will attempt
to locate acquisition opportunities in this arena that would allow us to grow
this niche market and allow us to maximize the use of our large inventory.


Air Conditioning, Refrigeration and Mechanical

We provide a broad variety of maintenance, repair, and replacement services to
both residential and commercial customers. Most of our air conditioning,
refrigeration and mechanical efforts are in the service, retrofit, and design
build markets. Our services include preventive maintenance (periodic checkups,
cleaning and filter change-outs), emergency repairs, and the replacement (in
conjunction with the retrofitting or remodeling of a residence or commercial
building, or as result of an emergency repair request) of HVAC and mechanical
systems including chillers, cooling towers, hydronics, process systems, and
automated temperature controls. We also provide certain specialized services and
technical facilities management services to commercial building owners or
building managers. In connection with both new installation business and
maintenance, repair and replacement services, we sell a wide range of HVAC
equipment, parts and supplies.

In 2005 our air conditioning business reached a milestone with its selection by
the Museum of Art Fort Lauderdale to perform the HVAC, mechanical and electrical
improvements needed to host the King Tut exhibition, Tutankhamun and the Golden
Age of the Pharaohs. With South Florida's marine climate, controlling humidity
and temperature inside the museum was essential to Fort Lauderdale's selection
as just one of four U.S. stops for the King Tut exhibit. This was a fast track
project starting July 12th and completed in late September. The project included
new chillers, piping, fresh air energy recovery ventilators, variable speed
drives for existing air handlers, and an elaborate computerized temperature
control system to manage the hundreds of variable conditions the Museum has
experienced since the exhibit opened December 15th with a public estimate of
400,000 visitors.


                                       5
<PAGE>

Marine Air Conditioning and Refrigeration

From our Marine facility located in Fort Lauderdale we provide American Boating
& Yachting Certified marine air conditioning and refrigeration services
primarily to private yachts between 40 feet and 230 feet(70 meters)in length.
The Marine division uses the same specialized home office based service
software, accounting, document imaging, and management systems thanks to high
speed internet access.

In 2003 we were awarded a full dealership by Marine Air (TM)to compliment our
prior dealerships for Cruisair (TM), Tundra(TM), Condaria(TM), Eskimo(TM),
U-Line(TM), Polar Bay(TM), and Grunert(TM). The South Florida market is referred
to by many as the boating capital of the United States, with megayachts now
docked and serviced here year round. Many seasonal megayachts use Fort
Lauderdale for their overhauls and refits, prior to chartering to the Caribbean
and the Mediterranean. A marine marketing campaign was launched in 2002 and it
has since been expanded to include both local and international marine
publications to reach this special clientele.

Wireless & Cellular Towers

Our wireless division provides services primarily to the cellular industry. We
operate our wireless and tower business under the name of Datatelcom, Inc. The
work is performed by our own employees and select outside subcontractors.

The nature of the work is the installation of antennas, coaxial cables,
electrical power of both AC and DC, and other electronic equipment on towers and
rooftops. The work is generally performed at heights from 100 feet to 300 feet
on rooftops, monopoles, self supporting towers and free standing towers.

We provide training to our tower climbers through a certification program
operated by an independent tower training company. We send one of our employees
to the third-party trainer who attends a comprehensive course in Certified Tower
Climbing Safety and Rescue. Upon completion of this course our employee receives
a certification which then enables him to teach this course to our other
employees. This provides the employees with the ability to use the needed
knowledge and skills to utilize the techniques and equipment effectively in
their individual work environments.

Safety is paramount to all of our operations. No parts of our operations are
ignored, but additional safety training and attention is maintained in the
wireless group. Since most of the wireless work is done at heights that exceed
100 feet, every precaution is taken to protect our employees.

Testing and certifications of the test equipment and the materials utilized by
the wireless division are an ongoing educational process supported by us. With
the certified training programs, our employees are equipped to perform the
highest quality of work while servicing the ever demanding cellular carriers.

We believe that the cellular industry is continuously evolving with new
technologies and expanding markets. Although the cellular carriers have suffered
recently on Wall Street, we believe that we have carved out a niche market that
should allow growth and increased sales over the next five years.


                                       6
<PAGE>

E-Commerce

We have developed a fully functional Internet web site that is both an internet
and an intranet. It is presently being utilized to market our divisions and
services as well as to allow our tradeshow customers to purchase and pay for
their exhibition services online. It is also growing in the information and
training programs being offered to our employees.

We believe that E-Commerce opportunities will benefit us. As a result we have
developed and will continue to develop, on-line services. We believe that the
Internet will allow us an opportunity to expand our market and improve our
efficiencies.


Competition

The facilities service industry is highly competitive with few barriers to
entry. We believe that the principal competitive factors are timeliness,
reliability and quality of services provided, range of services offered, market
share and visibility strengthened by advertising and price. Most of our
competitors are small, owner-operated companies that typically operate in a
single market. These smaller competitors may have lower overhead cost structures
and may be able to provide their services at lower rates. Often times, these
small competitors have long established relationships with homeowners for a
variety of home repairs, which makes that market difficult for us to penetrate.
There are currently a limited number of public companies focused on providing
services in some of the same service lines provided by us. Some of these
competitors, and potential competitors, have greater financial resources than we
do to finance acquisition and development opportunities, and may be able to pay
higher prices for the same opportunities to develop and support service
operations.

Our ability to employ, train and retain highly motivated service technicians to
provide quality service is a key to our success in being competitive. In order
to recruit qualified individuals, we offer attractive compensation, health and
savings benefits that are more comprehensive than those typically offered within
the industry, including a 401(k) plan.

Governmental Regulation

Many aspects of our business operations are subject to various federal, state
and local laws and regulations, including, among others, permitting and
licensing requirements; building, mechanical and electrical codes and zoning
ordinances; laws and regulations relating to consumer protection; laws and
regulations relating to worker safety and protection of human health.

We believe we have all the required permits and licenses to conduct our
operations and that we are in substantial compliance with applicable regulatory
requirements relating to our operations. If we were to fail to comply with the
applicable regulations it could result in substantial fines or revocation of our
operating permits.

A large number of state and local regulations governing the facilities services
trades require various permits and licenses to be held by individuals. In some
cases, a required permit or license held by a single individual may be
sufficient to authorize specified activities for all our service technicians who
work in the geographic area covered by the permit or license.


                                       7
<PAGE>

Environmental Regulation

Our operations are subject to numerous federal, state and local environmental
laws and regulations, including those governing vehicle emissions and the use
and handling of refrigerants. These laws and regulations are administered by
various federal, state and local governmental agencies. The technical
requirements of these laws and regulations are becoming increasingly complex and
stringent, and meeting these requirements can become expensive. We are subject
to the Clean Air Act, Title VI of which governs air emissions and imposes
specific requirements on the use and handling of substances known or suspected
to cause or contribute significantly to harmful effects on the stratospherical
ozone layer, such as chlorofluorocarbons and certain other refrigerants
("CFC's"). Clean Air Act regulations require the certification of service
technicians involved in the service or repair of systems, equipment and
appliances containing these refrigerants and also regulate the containment and
recycling of these refrigerants. These requirements have increased our training
expenses and expenditures for containment of recycling equipment. The Clean Air
Act is intended ultimately to eliminate the use of CFC's in the United States
and require alternative refrigerants to be used in replacement HVAC systems.

Expenditures related to environmental matters during the fiscal years ended May
31, 2005 and 2004, were not material. We do not currently anticipate any
material adverse effect on our business or consolidated financial position as a
result of future compliance with existing environmental laws and regulations.

Suppliers

We obtain materials and supplies from approximately 150 suppliers. Suppliers of
materials are plentiful and we are not dependent on any one vendor.

Cyclicality of the Industry

We generate increased revenues in the summer months when the dependency on air
conditioning is greater than in the winter months. The electrical services
business is not particularly cyclical.

Economic Dependence

We believe that there is always a demand for electrical and air conditioning
services. With the emergence of the broadband industry with fast computers, the
reliability of the electrical power and network computer wiring has become more
critical than ever. The required reliability of many of these electrical systems
exceeds 99.999%. Uninterruptible power supplies (UPS) and standby emergency
generators are required in greater numbers than ever before. Aside from the
initial installation of power and network cabling, ongoing maintenance programs
are imperative. Indoor air quality with proper temperature and humidity control
is also required. Many computer networks now require transmission of information
at gigabit speed which requires upgrading slower network cables. Fiber optics is
now replacing copper wire in many of these installations.

The electrical, data communications, telecommunications and air conditioning
construction services industry has had a higher overall growth rate than the
overall construction industry. This is due in part to the increase in complexity
of electrical and mechanical systems in many projects. This results from the
increased use of computers and more advanced data and voice communications and
environmental control systems. As a result, buildings are now consuming more
electricity per square foot than in the past and more extensive air conditioning
and electrical distribution systems are now required.


                                       8
<PAGE>

Voice, data communication and telecommunication systems now require more
reliable power supplies and improved low voltage and fiber optic cabling. The
need for increased environmental controls within a building, such as the
increased need for air conditioning control to maintain computer systems at
optimal temperatures and the increased demand for environmental control in
individual spaces, are creating expanded opportunities for electrical,
mechanical, telecommunications and data communications facilities service
businesses

Electrical and mechanical construction services involve the design, installation
and start-up of several systems. These include:

     1) Generation and distribution of electrical power including conduits,
        power cables, transformers, electrical panels, switch gear, controls,
        generators and uninterruptible power supplies,
     2) Lighting fixtures and controls,
     3) Voice and data communications, including fiber optic and copper cabling,
     4) Fire alarm, security, and process control, and,
     5) Heating, ventilation, air conditioning, refrigeration and increased
        requirements of all of these systems in clean-room applications

We perform most of our services pursuant to contracts with owners, corporations,
government organizations, construction managers, developers, general contractors
and individual tenants in multi-tenant facilities and we are not economically
dependent on any single customer or group.


Employees

As of May 31, 2006, we had approximately 143 employees. Approximately 61 were
employees in the electrical/tradeshow business, 42 were employees in the air
conditioning/mechanical business, 11 were employees in the marine air
conditioning business, 14 were employees in the wireless/cell tower business,
and 15 were employed in central administrative roles. We believe that our
relations with our employees are good. We are signatory to various collective
bargaining agreements with local unions representing approximately 50% of our
employees. None of these collective bargaining agreements are nationwide or
regional in scope.

We are a member of the National Electrical Contractors Association who
represents us in bargaining with the International Brotherhood of Electrical
Workers. Our air conditioning subsidiary is a member of the Mechanical
Contractors Association who represents us in bargaining with the United
Association of Journeyman and Apprentices of the Plumbing & Pipefitting
Industry.

Our Executive Officers

See the information contained in Part III, Item 9, which describes our executive
officers in detail.

Item 2. Description of Property.

We lease approximately 36,500 square feet for the warehousing, distribution and
executive offices located at 17850 NE 5th Avenue in Miami, Florida. The total
annual cost of this lease is approximately $307,095, including sales tax. A
large majority of the leased property is owned by a partnership of which Carol
Helms and W. Edd Helms, Jr., are the sole owners. W. Edd Helms is an officer and
director and the owner of approximately 90% of our common stock and is related
to some of our other officers and directors. We believe that these facilities
are in good condition and are sufficient to accommodate our needs. We believe
the rent to be reasonable and competitive in price with rent for similar
facility located at the Miami-Dade/Broward county line.


                                       9
<PAGE>

Item 3.  Legal Proceedings.

1. The case is filed with the 11th Judicial Circuit Court in Miami Dade County,
Case No. 04-8784. On or about May 12, 2001 Siemens Building Technologies Inc.
(Siemens) and Edd Helms Group (Helms) entered into a subcontract for the
installation of a fire alarm system at the Fountainbleau Hilton Hotel in Miami
Beach. Siemens was to provide engineered drawings for the installation of the
fire alarm system. Several issues developed during the construction dealing with
issues that include time delays, extra work and providing us with the
appropriate drawings resulting in additional costs which Siemens refused. In
addition, Siemens failed to provide approved engineered drawings, constituting a
material breech of contract. Accordingly, Helms declared Siemens to be in
material breach of contract and filed suit for breach of contract, fraudulent
misrepresentation and negligent misrepresentation for damages in excess of
$1,000,000. Siemens filed a counterclaim against us and our surety, XL Surety
Specialists. The surety responded and filed an action against us for
indemnification under the bond. The Siemens claim is in excess of $500,000. We
are of the opinion that we will be successful in the prosecution of the claim
and the defense of the counterclaim. At this time our legal counsel has informed
us that there is no reason to believe that there will be any material adverse
effect on the Company.


2. The case is filed with the 17th Judicial Circuit Court in Broward County,
Case No. 01-10407. A former employee of ours filed a suit against us for unpaid
compensation. A judgment of $47,000 was awarded to the plaintiff. The
plaintiff's attorney claimed to have a contingency agreement in place with his
client, which allows an attorney to recover his cost related to the case, times
a multiplier as determined by the court. In this case a signed contingency
agreement was not in place. In addition, the attorney did not track hours worked
on the case as required by the law. However a judgment was awarded to the
attorney for legal fees in the amount of $75,000, plus a multiplier of three.
The Company filed an appeal in this matter and issued an irrevocable letter of
credit against this judgment in the amount of $230,737. On November 1st of 2006
the appeals court ruled in favor of the plaintiff and confirmed the judgment of
fees as described above.

Considering the circumstances; we do not believe that the ultimate result of
both these cases will have a material adverse effect on the financial condition
of the Company. In September 2005, we started accruing legal fee expense for the
above cases at a rate of $15,000 per month to cover the cost of prosecution and
defense of these cases. At May 31, 2006, our total legal fee accrual is
$143,626.

Item 4.  Submission of Matters to a Vote of Security Holders.

No matters have been submitted during the year for vote.



                                       10
<PAGE>
                          PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

There is currently no established public trading market for our common stock. In
order to obtain bid quotations for our common stock, it is necessary to contact
certain broker/dealers, if any, who make a market in our common stock. We are
not aware of any such broker/dealers. Our NASDAQ trading symbol is EDDH.

The following tables set forth, for the periods indicated, the range of high and
low closing bid and ask price for our common stock from June 1, 2005, through
May 31, 2006. These quotations represent prices between dealers, do not include
retail markups, markdowns, or commissions, and do not represent actual
transactions. The following information for the fiscal years ended May 31, 2006
and 2005 was obtained from the NASDAQ historical data service.

                                                           Year Ended
                                                   May 31, 2006     May 31, 2005
                                                      High Low        High  Low
                                                    -----------      -----------
          First Quarter                            $ .24  $.14      $ .23  $.23
          Second Quarter                           $ .23  $.19      $ .25  $.25
          Third Quarter                            $ .26  $.23      $ .26  $.23
          Fourth Quarter                           $ .38  $.22      $ .20  $.14

On May 31, 2006, there were approximately 411 holders of record of our common
stock. This number does not include any adjustment for stockholders owning the
stock in "Street" name.

We have not paid dividends since our inception and do not anticipate paying any
dividends in the near future. We intend to retain earnings to provide funds for
general corporate purposes and the expansion of our business.

Item 6.  Management's Discussion and Analysis or Plan of Operations.

The following discussion should be read in conjunction with the consolidated
financial statements of Edd Helms Group, Inc. and Subsidiaries and the related
footnotes, included in this Annual Report as Item 7. This discussion contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on our current
expectations and involve risks and uncertainties that could cause our actual
results to differ materially from those set forth in the forward-looking
statements. See "Forward Looking Statements" and "Risk Factors".

Highlights of Critical Accounting Policies

Our significant accounting policies are described in Note 2 of Notes to
Consolidated Financial Statements which have been prepared in accordance with
generally accepted accounting principles in the United States. Management
believes that our most critical accounting policy is in accounting for long-term
construction contracts. Determining the points at which revenue should be
recognized as earned and costs should be recognized as expenses is a major
accounting issue common to all businesses engaged in the performance of
long-term construction contracts. We use the percentage-of-completion accounting
method for construction contracts in accordance with the American Institute of
Certified Public Accountants Statement of Position 81-1, "Accounting for
Performance of Construction-Type and Certain Production-Type Contracts". Each of
our business units calculates the percentage-of-completion of each contract by
dividing the costs incurred to date by the estimated total contract costs at
completion (the "cost-to-cost" method). This percentage is then applied to the
estimated total contract value (the total amount of revenue expected to be
realized from the contract) in order to calculate the amount of revenue to be
recognized to date on each contract. Provisions are recognized in the statement
of operations for the full amount of estimated losses on uncompleted contracts
whenever evidence indicates that the estimated total cost of a contract exceeds
its estimated total contract value.



                                       11
<PAGE>

Percentage-of-completion accounting requires considerable reliance on estimates
in determining revenues, costs, profit margins and the extent of progress toward
completion on a contract-by-contract basis. Uncertainties inherent in the
performance of contracts generally include labor availability and productivity,
job conditions, material cost, change order scope and pricing, final contract
settlements and other factors. These uncertainties are evaluated continually for
each contract, and the impact of changes in estimates of total contract costs,
total contract value, and other factors are reflected in the consolidated
financial statements in the period in which the revisions are determined.

Our business units enter into contracts primarily through competitive bids, with
the final terms and prices often negotiated with the customer. Although the
pricing terms and conditions of contracts vary considerably, most of these
contracts are known as "fixed-price" or "lump-sum" contracts, in which the
business unit essentially agrees to perform all acts under the contract for a
stated price. Our business units also enter into "cost-plus" contracts (costs
incurred plus a stated mark-up percentage or a stated fee) and
"time-and-materials" contracts (stated hourly labor rate plus the costs of
materials). Fixed-price contracts inherently contain higher risk of loss than
the other contract types, but management believes that we are generally able to
achieve higher gross profit margins on fixed-price contracts as a result of the
expertise and experience of our business units in bidding and job performance.
No assurance can be given, however, that we will not incur significant job
losses on contracts in the future.

We recognize maintenance, repair and replacement revenues, including maintenance
management services, as services are performed. Service contract revenue is
recognized ratably over the term of the service contract. We account for
revenues from fixed-price installation and retrofit contracts on a
percentage-of-completion basis using the cost-to-cost method.

Cost of services consists primarily of salaries, wages, benefits and insurance
of service and installation technicians, project managers and other field
support employees, materials, components, parts and supplies, engineered
equipment, subcontracted services, depreciation, fuel and other vehicle expenses
and equipment rentals. Selling, general and administrative expenses consist
primarily of compensation and related benefits for management, administrative
salaries and benefits, advertising, office rent and utilities, communications
and professional fees.

Accounts receivable collectibility represents another critical accounting
policy. Our business units grant credit, generally without collateral, to their
customers, which primarily include general contractors, property owners and
developers, governmental agencies, educational and medical institutions, and
commercial and industrial companies in a variety of industries. We are subject
to potential credit risk related to changes in business and economic factors
throughout the United States. However, we are entitled to payment for work
performed and often have certain lien rights that can be attached to the
property in which the work was performed. Additionally, management continually
monitors the financial condition of our customers to reduce risk of loss. We
provide an allowance for doubtful accounts when future collection is considered
doubtful. Historically, receivable collectibility has not been a significant
issue in our service industries.



                                       12
<PAGE>

Results of Operations, May 31, 2006, Compared to Year Ended May 31, 2005

Revenues Earned

Revenues increased approximately $4,413,488 or 24.3% to $21.2 million for the
fiscal year ended May 31, 2006, from $17.1 million for the fiscal year ended May
31, 2005. The increase can be attributed to additional sales staff, selling a
new product line of home generator systems, and growing commercial sales.

Costs of Revenues Earned

Cost of revenues was $15.2 million or 71.5% of revenues earned, for the year
ended May 31, 2006, as compared with $12.6 million or 74% of revenues earned for
the year ended May 31, 2005. Our gross profit margin as a percentage of revenues
earned for year ended May 31, 2006 was 28.5%, as compared with 26% for year
ended May 31, 2005. The margin is consistent with expectations, but we
continually focus on improving margins. We do this by being selective with job
opportunities and focus on the efficiency with which we perform work.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses for the year ended May 31, 2006
were $4,733,486 or 22.3% of revenues earned, as compared with $4,179,816 or
24.5% of revenues earned for the year ended May 31, 2005. SG&A increased in
dollars, but decreased as a percentage of sales. The increase in dollars was
necessary to invest in the infrastructure to support the company's growth. We
continue to focus on overhead cost control and adhering to operational budgets.

Income From Operations Before Income Taxes (Credits)

Income from operations before income taxes (credits) increased approximately
$878,442 to $1,209,662 as compared to the fiscal year ended May 31, 2005. This
increase in profitability can be attributed to generating $4.4 million in
additional sales at a gross margin 2.5% higher than year ended May 31, 2005.

Provision for Income Taxes (Credits)

We follow Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes. That statement focuses on the balance sheet and on calculating
deferred tax assets and liabilities. Deferred income tax expense (and our
provision for income taxes (credits) is the difference between the deferred tax
balance sheet accounts at the beginning and end of each period. For the year
ended May 31, 2006 our income tax expense was $315,807, offset by the
utilization of our net operating loss carry-forward in the amount of $150,562.
For the year ended May 31, 2005 our income tax expense was $193,807, offset by
the utilization of our net operating loss carry-forward in the amount of
$193,807.

Liquidity and Capital Resources

As of May 31, 2006, we had cash, cash equivalents and securities available for
sale totaling approximately $1,499,691 compared with $1,259,729 as of May 31,
2005. Working capital increased to $4.036 million at May 31, 2006, compared to
$3.356 million in the prior year. Our ratio of current assets to current
liabilities was 2.17 to 1 as of May 31, 2006, compared to 2.54 to 1 in the prior
year. During fiscal 2006, our cash increased by approximately $239,879.
Liquidity increased due to sales growth and lower selling, general and
administrative expense as a percent of sales revenue. Historically, we have
financed our operation and growth with internally generated working capital. Our
primary requirement for capital consists of purchasing vehicles, equipment,
inventory and supplies used in the operation of our business. Our credit line
was used during the year to fund an irrevocable letter of credit for pending
litigation. We expect to use our credit line as it may be needed from time to
time for short-term working capital. We anticipate that our cash flow from
operations will provide cash in excess of our normal working capital needs, debt
service requirements and planned capital expenditures in the year ahead.



                                       13
<PAGE>

Effects of Inflation

We believe that our revenues and results of operations have not been
significantly affected by inflation during the last two years ended May 31,
2006.




                                       14
<PAGE>

Item 7. Financial Statements






                     C O N T E N T S

                                                                       Page
                                                                       -----
Report of Independent Registered Accounting Firm                        16

Consolidated Balance Sheets                                             17

Consolidated Statements of Operations and
  Comprehensive Income                                                  18

Consolidated Statements of Cash Flows                                   19

Consolidated Statements of Stockholders' Equity                         20

Notes to Consolidated Financial Statements                           21 to 31

















                                       15
<PAGE>

Dohan and Company                                  7700 North Kendall Drive, 200
Certified Public Accountants                           Miami, Florida 33156-7564
A Professional Association                             Telephone  (305) 274-1366
                                                       Facsimile  (305) 274-1368
                                                       E-mail     info@uscpa.com
                                                       Internet    www.uscpa.com

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Stockholders and Board of Directors
Edd Helms Group, Inc. and Subsidiaries
Miami, Florida

We have audited the accompanying consolidated balance sheets of Edd Helms Group,
Inc. and Subsidiaries as of May 31, 2006 and 2005, and the related consolidated
statements of income and comprehensive income, cash flows and stockholders'
equity for the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Edd Helms Group,
Inc. and Subsidiaries at May 31, 2006 and 2005, and the results of its
operations and its cash flows for the years then ended in conformity with U.S.
generally accepted accounting principles.



                                           /s/ Dohan and Company, P.A.
                                               Certified Public Accountants

Miami, Florida
August 16, 2006



                                       16
<PAGE>
EDD HELMS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
May 31,                                                  2006            2005
--------------------------------------------------------------------------------
                                     ASSETS
CURRENT ASSETS
Cash and cash equivalents                          $  1,498,769   $   1,258,890
Available-for-sale equity security                          921             839
Accounts receivable, less allowance for doubtful
  accounts of $115,435 and $182,334                   2,669,311       2,215,449
Due from employees                                       13,771          10,571
Other receivables                                       299,878          86,968
Costs and estimated earnings in excess of billings
  on uncompleted contracts                            1,307,536         416,361
Inventories                                           1,421,477         994,219
Prepaid expenses                                        170,908         284,912
Deferred income tax asset                               102,783         265,642
--------------------------------------------------------------------------------
TOTAL CURRENT ASSETS                                  7,485,354       5,533,851
--------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT, NET                           1,024,859         738,319
--------------------------------------------------------------------------------
OTHER ASSETS
Excess of cost over net assets of businesses
Acquired, net                                           143,866         143,866
Other Assets                                            269,615          72,690
--------------------------------------------------------------------------------
TOTAL OTHER ASSETS                                      413,481         216,556
--------------------------------------------------------------------------------
TOTAL ASSETS                                       $  8,923,694   $   6,488,726
================================================================================
                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt                                    $    230,737   $         -
Current maturities of long-term debt                     86,938          51,353
Current obligations under capital leases                 84,369          22,750
Accounts payable                                        975,543         476,772
Accrued liabilities                                   1,018,253         614,491
Deferred revenue                                         76,985          81,308
Billings in excess of costs and estimated
 earnings on uncompleted contracts                      840,121         931,292
Provision for income taxes payable                      313,411             -
--------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES                             3,626,357       2,177,966
--------------------------------------------------------------------------------
LONG-TERM LIABILITIES
Deferred Income Tax Liability                           152,732         136,481
Long-term debt                                          119,251          82,855
Long-term debt under capital leases                     146,091             -
--------------------------------------------------------------------------------
TOTAL LONG-TERM LIABILITIES                             418,074         219,336
--------------------------------------------------------------------------------
TOTAL LIABILITIES                                     4,044,431       2,397,302
--------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES (NOTES 10, 13 AND 15)
STOCKHOLDERS' EQUITY
Common stock;$.01 par value; 20,000,000 shares
  authorized; 12,661,358 shares issued;
  12,574,896 shares outstanding                         126,614         126,614
Additional paid-in capital                              208,182         208,182
Retained earnings                                     4,567,812       3,850,671
Treasury stock, 86,462 shares at cost                   (23,345)        (23,345)
Unrealized loss on available-for-sale equity security       -           (70,698)
--------------------------------------------------------------------------------
      TOTAL STOCKHOLDERS' EQUITY                      4,879,263       4,091,424
--------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $   8,923,694   $   6,488,726
================================================================================
See accompanying notes.


                                       17
<PAGE>

EDD HELMS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the years ended May 31,                            2006              2005
--------------------------------------------------------------------------------
REVENUES EARNED                                   $ 21,205,252    $  17,061,764
COST OF REVENUES EARNED                             15,097,581       12,619,097
--------------------------------------------------------------------------------
GROSS PROFIT                                         6,107,671        4,442,667
--------------------------------------------------------------------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES         4,799,592        4,179,816
--------------------------------------------------------------------------------
INCOME FROM OPERATIONS BEFORE OTHER
 INCOME AND EXPENSES AND INCOME TAX CREDITS          1,308,079          262,851
--------------------------------------------------------------------------------
INTEREST INCOME                                          4,086            2,835
OTHER INCOME                                            19,930           95,555
INTEREST EXPENSE                                       (24,704)         (20,014)
LOSS ON SALES OF EQUIPMENT                             (27,031)         (10,007)
--------------------------------------------------------------------------------
TOTAL OTHER INCOME (EXPENSES)                          (27,719)          68,369
--------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                           1,280,360          331,220
--------------------------------------------------------------------------------
INCOME TAXES
Provision for federal and state income taxe            437,850          193,807
Benefit from utilization of net operating
  Loss carryforward                                   (124,439)        (193,807)
Deferred federal and state income tax                  179,110          149,856
--------------------------------------------------------------------------------
TOTAL PROVISION FOR INCOME TAXES                       492,521          149,856
--------------------------------------------------------------------------------
NET INCOME                                             787,839    $     181,364
--------------------------------------------------------------------------------
IMPAIRMENT LOSS ON SECURITIES
 AVAILABLE FOR SALE                               $    (70,698)             -
--------------------------------------------------------------------------------
COMPREHENSIVE INCOME                              $    717,141          181,364
================================================================================
NET INCOME PER SHARE
                            - BASIC               $       0.06    $        0.01
                            - DILUTED             $       0.06    $        0.01
================================================================================
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC         12,574,896       12,574,896
                                    - DILUTED       12,734,896       12,546,325
================================================================================
See accompanying notes.


                                       18
<PAGE>

EDD HELMS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended May 31,                              2006            2005
--------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Income from operations                      $    787,839    $     181,364
--------------------------------------------------------------------------------
Adjustments to reconcile net income (loss) to
  net cash provided (used) by operating activities:
Depreciation and amortization                          347,111          354,260
Loss on disposal of property & equipment                27,030           10,007
Deferred income taxes                                  179,110          149,856
Provision for doubtful accounts                       (129,989)            (360)
Change in assets (increase) decrease:
 Impairment loss on available for sale securities      (70,698)            -
 Accounts receivable                                  (323,872)        (131,729)
 Due from employees                                     (3,200)          (3,750)
 Other receivables                                    (212,910)          (9,154)
 Deferred contract costs                                   -                -
 Costs and estimated earnings in excess of billings
   on uncompleted contracts                           (891,175)          72,208
 Inventories                                          (427,258)          33,624
 Prepaid expenses                                      113,847            6,380
 Other assets                                         (126,310)         (45,063)
Change in liabilities increase (decrease):
 Accounts payable                                      501,545         (331,619)
 Accrued liabilities                                   401,146          198,178
 Deferred revenue                                       (4,324)         (48,514)
 Billings in excess of costs and
  estimated earnings on uncompleted contracts          (91,171)         678,065
 Provision for income taxes                            313,411
--------------------------------------------------------------------------------
Net cash provided for operating activities             390,132        1,113,753
--------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from capital leases                          269,986              -
 Payment of capitalized lease obligations              (66,729)         (17,047)
 Proceeds from credit line                             230,737          400,000
 Repayment of credit line                                  -           (400,000)
 Proceeds from notes payable                           164,416          109,345
 Payments on notes payable                            (110,490)        (175,733)
--------------------------------------------------------------------------------
Net cash used for financing activities                 487,920          (83,435)
--------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of property and equipment                   (666,971)        (179,623)
 Disposal of property & equipment                       28,798           70,941
--------------------------------------------------------------------------------
Net cash used for investing activities                (638,173)        (108,682)
--------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH                            239,879          921,636
CASH, beginning of year                              1,258,890          337,254
CASH, end of year                                 $  1,498,769    $   1,258,890
================================================================================

SUPPLEMENTAL DISCLOSURES
Interest paid                                     $     24,704    $      14,724
Interest received                                 $      4,086    $       1,498
Income taxes paid                                 $        -      $         -
================================================================================
See accompanying notes.


                                       19
<PAGE>

EDD HELMS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the years ended May 31, 2006 and 2005

                        Additional
          Common Stock    Paid-in   Retained Treasury Stock Unrealized
          Shares   Amount  Capital   Earnings Shares  Amount Loss on      Total
                                                             Available-for
                                                             -Sale Equity
                                                             Security
--------------------------------------------------------------------------------
May 31, 2004

    12,661,358 $126,614 $208,182 $3,669,307  86,462($23,345)($70,698)$3,910,060

--------------------------------------------------------------------------------
May 31, 2005

Net Income -        -        -      181,364     -       -        -      181,364

    12,661,358 $126,614 $208,182 $3,850,671  86,462($23,345)($70,698)$4,091,424

--------------------------------------------------------------------------------
May 31, 2006

Impairment Loss on available
 for sales equity securities                                  70,698     70,698

Net Income -        -        -      717,141     -       -        -      717,141

    12,661,358 $126,614 $208,182 $4,567,812  86,462($23,345)     -   $4,879,263
================================================================================

See accompanying notes


                                       20
<PAGE>

Edd Helms Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

Note 1. Business

Nature of Operations - Edd Helms Group, Inc. is a Florida corporation and has
three reportable segments. The electrical segment has provided electrical
service, repair, and maintenance of commercial and residential facilities in the
South Florida area since 1975. The air conditioning segment derives the majority
of its business activity from its service, repair and maintenance of commercial
and residential air conditioning systems, including marine applications in the
South Florida area. The third segment provides wireless communication solutions.
The nature of the work is the installation, maintenance and repair of antennas
and other electronic equipment on cellular towers and rooftops.

Note 2.  Summary of Significant Accounting Policies

Basis of Presentation - The accompanying consolidated financial statements
include the accounts of Edd Helms Group, Incorporated (EHG) and its wholly owned
subsidiaries, Edd Helms Air Conditioning, Inc. (Air Conditioning) and
Datatelcom, Inc. (Datatelcom). The Company also has a wholly-owned subsidiary,
Edd Helms Marine Air Conditioning and Refrigeration, LLC. All significant
intercompany accounts and transactions of Edd Helms Group, Inc. and Subsidiaries
(the Company) for the periods presented have been eliminated in consolidation.

Cash and Cash Equivalents - Cash and cash equivalents consist of time deposits
and all liquid instruments (including overnight repurchase agreements with a
bank) with maturities of three months or less.

Available-for-Sale Equity Security - Marketable securities consist of common
stock and are stated at market value as determined by the most recently traded
price of each security at the balance sheet date. All marketable securities are
defined as trading securities or available-for-sale securities under the
provisions of Statement of Financial Accounting Standards No. 115 (SFAS 115),
"Accounting for Certain Investments in Debt and Equity Securities". Management
determines the appropriate classification of its investments in marketable
securities at the time of purchase and reevaluates such determination at each
balance sheet date. Available-for-sale securities are carried at fair value.

Revenue and Cost Recognition - Revenues and direct costs produced by the
Company's hourly based electrical and air conditioning service, repair, and
maintenance activities are recognized as earned or incurred. Revenues from work
orders are classified as service related revenues, and recognized as earned.
Revenues from service and maintenance contracts are recognized over the term of
the contracts. Revenues from significant construction contracts, excluding
wireless antenna services, are recognized on the percentage-of-completion
method, measured by the percentage of costs incurred to date to estimated total
costs for each contract. This method is used because management considers
expended costs to be the best available measure of progress on the contracts.



                                       21
<PAGE>

These percentage-of-completion contract costs include direct labor, material,
subcontract, equipment rental, and other miscellaneous direct and indirect costs
as allocated. Other operating costs are charged to expense as incurred.
Provisions for estimated losses, if any, on uncompleted contracts are made in
the period in which such losses are determined. In estimating the ultimate
profitability on certain contracts, and for all wireless antenna services,
estimated recoveries are included for work performed under customer change
orders to contracts for which firm prices have not yet been negotiated. The
costs incurred for these change orders is reported as "Deferred contract costs"
on the balance sheets, while the related estimated revenue is recorded as
"Deferred revenue". Also included in "Deferred contract costs", are amounts the
Company seeks or will seek to collect from customers or others for errors or
changes in contract specifications or design, contract change orders in dispute
or unapproved as to both scope and price, or other customer-related causes of
unanticipated additional contract costs (claims and unapproved change orders).
These amounts are recorded at their estimated net realizable value when
realization is probable and can be reasonably estimated. No profit is recognized
on the construction costs incurred in connection with these amounts. Unapproved
change orders involve the use of estimates, and it is reasonably possible that
revisions to the estimated recoverable amounts of recorded unapproved change
orders may be made in the near-term. Changes in job performance, job conditions,
and estimated profitability, including those arising from contract penalty
provisions and final contract settlements may result in revisions to costs and
income and are recognized in the period in which the revisions are determined.

The asset "Cost and estimated earnings in excess of billings on uncompleted
contracts" represents revenues recognized in excess of amounts billed. The
liability "Billings in excess of costs and estimated earnings on uncompleted
contracts" represents amounts billed in excess of revenues earned.

Inventories - Inventories consist principally of electrical and air conditioning
equipment, supplies, components and accessories, and are valued at the lower of
cost or market using the first-in, first-out (FIFO) method to determine cost and
net realizable value to determine market.

Property and Equipment - Property and equipment is recorded at cost.
Expenditures for major betterments and additions are charged to the property
accounts, while replacements, maintenance, and repairs that do not improve or
extend the lives of the respective assets are charged to expense currently.
Depreciation is computed principally using the straight-line method, based on
the estimated useful lives of the assets, which range from five to ten years.

Income Taxes - Income taxes are computed under the provisions of the Financial
Accounting Standards Board Statement (SFAS) No. 109, "Accounting for Income
Taxes,". SFAS 109 is an asset and liability approach that requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of the differences in events that have been recognized in the
Company's financial statements compared to the tax returns. Current and deferred
taxes are allocated to members of the consolidated group by applying FASB
Statement No. 109 to each member as if it were a separate taxpayer.

Income Tax Credits - Income tax credits will be recognized as a reduction of the
provision for income taxes in the year in which utilized.

Amortization - Goodwill was previously amortized using the straight-line method.
Goodwill recognized as a result of the merger on July 1999, was being amortized
over five years. Goodwill representing the acquisition of a communications
business, acquired during 1999, was being amortized over fifteen years. SFAS 142
requires that ratable amortization of goodwill be replaced with periodic test of
the goodwill impairment and that intangible assets other than goodwill and other
indefinite lived intangible assets, be amortized over their useful lives. SFAS
141 is effective for all business combinations initiated after June 30, 2001,
and for all business combinations accounted for by the purchase method for which
the date of acquisition is after June 30, 2001. The provisions of SFAS 142 are
effective for fiscal years beginning after December 15, 2001. In addition, the
standard includes provisions for the reclassification of certain existing
recognized intangibles as goodwill, reassessment of the useful lives of existing
recognized intangibles, reclassification of certain intangibles out of
previously reported goodwill and the identification of reporting units for
purposes of assessing potential future impairments of goodwill. SFAS 142 also
requires the Company to complete a transitional goodwill impairment test six
months from the date of adoption. Based on the initial impairment test on June
1, 2002, it was determined that none of the goodwill recorded was impaired.
Impairment adjustments recognized after adoption, if any, generally are required
to be recognized as operating expenses. The Company performed the impairment
test on goodwill as of May 31, 2006, and determined that goodwill was not
impaired.



                                       22
<PAGE>

Concentrations of Credit Risk and Economic Dependence - The Company provides its
electrical and air conditioning services in the South Florida area.
Consequently, the Company's ability to collect the amounts due from customers
may be affected by economic fluctuations in the service and construction
industries, its geographical location and natural disasters. Concentrations of
credit with respect to trade receivables, consists primarily of five customers
who comprise 32% of accounts receivables. However, the Company is entitled to
payment for work performed and often has certain lien rights in that work. The
Company monitors its exposure for credit losses and maintains allowances for
anticipated losses. Additionally, management continually monitors the financial
condition of its customers to reduce risk of loss. The Company provides an
allowance for doubtful accounts when, in their judgment, future collection is
considered doubtful. Concentrations with respect to sales exist in that revenue
from two customers comprise approximately 25% of revenue for the current fiscal
year.

Concentrations of Credit Risk Arising from Cash Deposits in Excess of Insured
Limits - The Company maintains the majority of its cash balances in financial
institutions located in Miami, Florida. The balance in each institution is
insured by the Federal Deposit Insurance Corporation up to $100,000.
Additionally, the Company maintains sweep accounts utilizing nightly repurchase
accounts which are uninsured by the Federal Deposit Insurance Corporation. At
May 31, 2006, the Company's balances in these sweep accounts totaled $124,164.
At May 31, 2006, the Company's uninsured cash and sweep balances total
$1,187,546.

Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates.

Reclassifications - Certain amounts in the prior year financial statements have
been reclassified for comparative purposes to conform to the current year
presentation.

Advertising - Advertising costs are charged to operations in the year incurred.
Advertising expense for the years ended May 31, 2006 and 2005, amounted to
$364,829 and $441,903, respectively.

Fair Value of Financial Instruments - Cash, receivables, accounts payable, debt,
accrued expenses and other liabilities are carried at amounts which reasonably
approximate their fair value due to the short-term nature of these amounts or
due to variable rates of interest which are consistent with current market
rates.

Basic and Diluted Net Income Per Share - Basic net income per common share is
computed by dividing the net income by the weighted average number of common
shares outstanding during each period. The 400,000 available stock options at
May 31, 2006 and 2005, were anti-dilutive and therefore excluded from net income
per share calculations.



                                       23
<PAGE>

In November 2004, the FASB issued FAS 151 "Inventory Costs, an amendment of ARB
No. 43, Chapter 4." This Statement amends the guidance in ARB No. 43, Chapter 4,
"Inventory Pricing," to clarify the accounting for abnormal amounts of idle
facility expense, freight, handling costs, and wasted material (spoilage). This
Statement is effective for inventory costs incurred during fiscal years
beginning after June 15, 2005.

In December 2004, the FASB issued FAS 152 "Accounting for Real Estate
Time-Sharing Transactions, an amendment of FASB Statements No. 66 and 67." This
Statement amends FASB Statement No. 66, Accounting for Sales of Real Estate, to
reference the financial accounting and reporting guidance for real estate
time-sharing transactions that is provided in AICPA Statement of Position (SOP)
04-2, Accounting for Real Estate Time-Sharing Transactions. This Statement also
amends FASB Statement No. 67, Accounting for Costs and Initial Rental Operations
of Real Estate Projects, to state that the guidance for (a) incidental
operations and (b) costs incurred to sell real estate projects does not apply to
real estate time-sharing transactions. The accounting for those operations and
costs is subject to the guidance in SOP 04-2. This Statement is effective for
financial statements for fiscal years beginning after June 15, 2005.

In December 2004, the FASB issued FAS 153 "Exchanges of Non-monetary Assets, an
amendment of APB Opinion No. 29." This Statement is the result of a broader
effort by the FASB to improve the comparability of cross-border financial
reporting by working with the International Accounting Standards Board (IASB)
toward development of a single set if high-quality accounting standards. As part
of that effort, the FASB and the IASB identified opportunities to improve
financial reporting by eliminating certain narrow differences between their
existing accounting standards. The accounting for non- monetary exchanges was
identified as an area in which the U.S. standard could be improved by
eliminating certain differences between the measurement guidance in Opinion 29
and that in IAS 16, Property, Plant and Equipment, and IAS 38, Intangible
Assets. This Statement is effective for non-monetary exchanges occurring in
fiscal periods beginning after December 15, 2005.


In December 2004, FASB issued Statement of Financial Accounting Standards No.
123R, "Share Based Payment" ("SFAS 123R"). SFAS 123R supersedes APB 25 and its
related implementation guidance by requiring entities to recognize the cost of
employee services received in exchange for awards of equity instruments based on
the grant-date fair value of those awards (with limited exceptions) and revises
SFAS 123 as follows:

i.       Public entities are required to measure liabilities  incurred to
         employees in share-based  payment  transactions at fair value
         and nonpublic  entities may elect to measure their liabilities to
         employees  incurred in share-based  payment  transactions at
         their intrinsic value whereas under SFAS 123, all share-based payment
         liabilities were measured at their intrinsic value.
ii.      Nonpublic  entities  are  required to  calculate  fair value  using an
         appropriate  industry  sector  index for the  expected
         volatility of its share price if it is not practicable to estimate the
         expected volatility of the entity's share price.
iii.     Entities are  required to estimate the number of  instruments  for
         which the  requisite  service is expected to be rendered as
         opposed to accounting for forfeitures as they occur.
iv.      Incremental  compensation  cost for a  modification  of the terms or
         conditions of an award is measured by comparing the fair
         value of the modified award with the fair value of the award
         immediately  before the  modification  whereas SFAS 123 required
         that the effects of a modification  be measured as the difference
         between the fair value of the modified award at the date it
         is granted and the award's value  immediately  before the  modification
         determined  based on the shorter of (1) its remaining initially
         estimated expected life or (2) the expected life of the modified award.




                                       24
<PAGE>

SFAS 123R also clarifies and expands guidance in several areas, including
measuring fair value, classifying an award as equity or as a liability and
attributing compensation cost to reporting periods. SFAS 123R does not change
the accounting guidance for share-based payment transactions with parties other
than employees provided in SFAS 123 as originally issued and EITF 96-18. SFAS
123R also does not address the accounting for employee share ownership plans
which are subject to Statement of Position 93-6, "Employers' Accounting for
Employee Stock Ownership Plans". Public entities (other than those filing as
small business issuers) will be required to apply SFAS 123R as of the first
annual reporting period that begins after June 15, 2005. Public entities that
file as small business issuers will be required to apply SFAS 123R in the first
annual reporting period that begins after December 15, 2005. For nonpublic
entities, SFAS 123R must be applied as of the beginning of the first annual
reporting period beginning after December 15, 2005.

In May 2005, FASB issued Statement of Financial Accounting Standards No. 154
Accounting Changes and Error Corrections - replacement of APB Opinion No. 20 and
FASB Statement No. 3 ("SFAS 154"), which is effective for fiscal years ending
After December 15, 2005. This Statement changes the requirements for the
accounting for and reporting of a change in accounting principle. This Statement
applies to all voluntary changes in accounting principle. It also applies to
changes required by an accounting pronouncement in the unusual instance that the
pronouncement does not include specific transition provisions. When a
pronouncement includes specific transition provisions, those provisions should
be followed.

The adoption of these new pronouncements are not expected to have a material
effect on the Company's consolidated financial position or results of
operations, with the exception of SFAS 123R which will have a material impact on
compensation expense if stock options are issued in subsequent years.


Note 3. Available-for-Sale Equity Security

We recognized the losses on available-for-sale security at May 31, 2006,
previously carried in the equity section of our balance sheet in the amount of
$70,698.

Note 4. Accounts Receivable

Accounts receivable consisted of the following:
                                                        2006            2005
                                                    ------------    ------------
Contracts completed and in progress - billed        $ 1,811,991     $ 1,450,417
Contracts completed and in progress - unbilled          833,575         801,326
Retention                                               139,180         146,040
Allowance for doubtful accounts                        (115,435)       (182,334)
                                                    ------------    -----------
                                                    $ 2,669,311     $ 2,215,449
                                                    ============    ============

Note 5.  Other receivables

Other receivables consists of a receivables related to a court order for payment
of services rendered and receivables placed in the hands of a collection
attorney for non-payment of work performed, in addition to a receivable for the
bartering of services with a business partner. The court order relates to a
judgment against the AMTL Corporation and its owner. Initially, an agreement was
reached for AMTL to make monthly payments until payment is received in full.
Since the beginning of 2006 AMTL has not meet the terms of the agreement. In
September of 2006, we filed papers with the courts to execute the judgment and
move forward against the assets of AMTL and the owner.



                                       25
<PAGE>

Note 6. Costs and Estimated Earnings on Uncompleted Contracts

Costs and estimated earnings on uncompleted contracts are summarized as follows:

                                                        2006            2005
                                                    ------------    -----------
Billings on uncompleted contracts                   $ 3,918,925     $ 4,198,380
                                                   ------------    -----------
Costs incurred on uncompleted contracts             ( 1,170,667)     (2,796,331)
Estimated earnings on uncompleted contracts         ( 3,215,673)     (  887,118)
                                                    ------------    -----------
Total costs and estimated earnings on
  uncompleted contracts                             ( 4,386,340)     (3,683,449)
                                                    ------------    -----------
                                                    $   467,415     $(  514,931)
                                                    ============    ===========

These amounts are included in the accompanying consolidated balance sheets as
follows:
                                                         2006           2005
                                                    ------------    ------------
Billings in excess of costs and estimated
  earnings on uncompleted contracts                ($    840,121)  ($   931,292)
Costs and estimated earnings in excess
  of billings on uncompleted contracts                 1,307,536        416,361
                                                    ------------    -----------
                                                    $    467,415   ($   514,931)
                                                    ============    ===========

Note 7. Property and Equipment

Property and equipment consisted of the following:
                                                         2006           2005
                                                    ------------    ------------
Transportation equipment                            $ 2,136,229     $ 1,831,700
Machinery and equipment                                 719,262         574,599
Furniture and fixtures                                   56,964          56,964
Computer equipment and software                         490,501         468,634
Leasehold improvements                                  223,464         223,464
                                                    -----------     -----------
                                                      3,626,420       3,155,361
Accumulated depreciation                           (  2,601,561)   (  2,417,042)
                                                    -----------     -----------
Property and equipment, less
  accumulated depreciation                          $ 1,024,859         738,319
                                                    ===========     ===========

Depreciation expense for the years ending May 31, 2006 and 2005, amounted to
$347,111 and $354,260, respectively, and is included in costs of revenues earned
and selling, general and administrative expenses in the consolidated statements
of operations and comprehensive income.



                                       26
<PAGE>

Note 8. Income Taxes

The provisions for income taxes are summarized as follows:
                                                         2006           2005
                                                     ------------   ------------
Current tax, net of utilization of net operating
  loss carryforwards:

Federal                                              $  313,411     $      -
State                                                      -               -
                                                     ----------     -----------
 Total current tax                                      313,411            -
                                                     ----------     -----------

Deferred tax, net of utilization of net operating
  loss carryforwards:

Federal                                                 161,832         135,400
State                                                    17,278          14,456
                                                     ----------     -----------
Total deferred tax                                      179,110         149,856
                                                     ----------     -----------
Total income taxes                                   $  492,521     $   149,856
                                                     ==========     ===========

The Company files consolidated income tax returns with its two wholly-owned
corporate subsidiaries. Deferred income taxes and benefits for 2006 and 2005 are
provided for certain income and expenses which are recognized in different
periods for tax and financial reporting purposes. The principal temporary
differences that give rise to the deferred tax asset (liability) and the effects
(computed at 37.63% in both years) that the changes in those temporary
differences had on the provision for deferred tax expense are as follows:

                                                         2006          2005
                                                     ------------   ------------
Deferred tax asset:
Accrued officers' salaries                           $      1,388   $     1,922
Allowance for bad debts                                    43,438        68,612
Full absorption cost method                                57,957        44,546
Net operating loss carryforward                               -         150,562
                                                     ------------   -----------
Total deferred tax asset                                  102,783       265,642
                                                     ------------   -----------

Deferred tax liability:
Depreciation                                              (98,595)     (113,826)
Amortization                                              (54,137)      (22,655)
                                                      -----------   -----------
Total deferred tax liability                             (152,732)     (136,481)
                                                      -----------   -----------

Net deferred tax (liability) asset                    $   (49,949)  $   129,161
                                                      ===========   ===========

The amounts have been presented in the Company's financial statements as
follows:
                                                         2006           2005
                                                     ------------   ------------
Current deferred tax asset                           $    102,783   $   265,642
Non-current deferred tax liability                       (152,732)     (136,481)
                                                     ------------   -----------
Net deferred tax (liability) asset                        (49,949)  $   129,161
                                                     ============   ===========

The federal net operating loss carryforwards at May 31, 2006 and 2005, were $0
and $365,996 respectively.

A valuation allowance must be established to reduce deferred income tax benefits
if it is more likely than not that a portion of the deferred income tax benefits
will not be realized. It is Management's opinion that it is likely that the
entire deferred tax benefit will be recognized in future years. Therefore, no
valuation allowance has been established.



                                       27
<PAGE>

Note 9. Employee Benefit Plans

Combined Employee Stock Ownership Plan & Deferred Profit Sharing Plan - The
Company has a qualified employee stock ownership plan (ESOP) combined with a
deferred compensation profit sharing plan (401K) under Sections 401 and 401K of
the Internal Revenue Code, covering substantially all full-time employees. All
employee benefit plan administrative expenses are paid at the option of the
Company. This current Plan has two different employee groups. As of May 31, 2006
the asset value of this current Plan is $1,692,514.

The first group of employees in the current Plan consists of employees for whom
the Company is required to make defined benefit or defined contribution payments
under the terms of various collective bargaining agreements. For this specific
group, the Company cannot make employer matching or other employer contributions
to either the ESOP or 401(k) portions of the current Plan. Employees in this
group can and did make their own contributions into the 401(k) portion of the
current Plan in 2006 and 2005.

The second group of employees in the current Plan consists of all remaining
employees not included in the first group. For this specific group, the Company
is permitted to make employer matching or other employer contributions to either
the ESOP or 401(k) portions of the current Plan. Employer Contributions to the
current Plan are at the discretion of the Board of Directors, and are limited to
a specified percentage of eligible compensation for each participant. For this
second group of employees in the current Plan, Employer matching contributions
were made into the 401(k) portion of the plan in 2006 and 2005.

During 2005 the Company retained UBS Financial Services and The Pension Studio
to manage and evaluate the current combination ESOP and 401(k) Plans and to
provide financial planning services to our employees. As a result of their
recommendations the Company established a new qualified 401(k) retirement plan
effective on June 1, 2005, transferred all 401(k) assets from combination
ESOP/401(k) plan to the new 401(k)plan on May 2, 2006, with elective deferrals
into this new Plan effective May 2, 2006. As of May 3, 2006 the only asset
remaining in the combination ESOP/401(k) Plan is 1,159,970 shares of Edd Helms
Group, Inc. stock. This new Plan will include the same two groups of employees
with the same employer matching or other employer contributions rules as the
current Plan, but this new Plan will not include the ESOP. An Application was
made to the Internal Revenue Service on July 31, 2006, for the Determination of
Terminating the Edd Helms Employee Stock Ownership Plan (ESOP). Following the
IRS approval, there will be a distribution to each employee eligible to
participate under the ESOP. The form of the distribution, in cash or in stock,
is still under review by our Securities and ERISA attorneys. Following the
distribution, the ESOP Plan will be terminated.

Incentive Stock Option Plan - Upon shareholder approval, the Company adopted its
Incentive Stock Option Plan (ISOP) in order to attract, retain and motivate
employees who contribute materially to the success of the Company. Employees of
the Company and its subsidiaries are covered by the ISOP. Under the terms of the
ISOP, the Company is authorized to grant incentive stock options to purchase up
to an aggregate of 1,500,000 shares of its common stock. The option price under
the ISOP will be the fair market value of the common stock at the date of grant
or, if granted to individuals who own 10% or more of the Company's common stock,
at 110% of fair market value. No option is exercisable after ten years from the
date of grant (five years for holders of greater than 10% of the stock). The
ISOP is administered by the Compensation Committee for the Company's Board of
Directors. During 2002, options were granted to two officers in the amount of
200,000 purchase options each, while 1,100,000 shares remain available for
future grants under this plan.

Non-Qualified Stock Option Plan - In May of 2004, the shareholders approved a
non-qualified stock option plan. The maximum aggregate number of common shares
which may be optioned and sold pursuant to the plan is 250,000. The option price
is the fair market value of the common shares at the date of grant. No option is
exercisable after five years from the date of grant. Options were granted to two
directors of the Company in the amount of 10,000 each, while 230,000 shares
remain available for future grants under the plan.



                                       28
<PAGE>

Note 10. Related Party Transactions

The Company leases its facilities under a three-year operating lease, expiring
on February 28, 2009. The lease is from a partnership affiliated through common
ownership, at rental rates that management believes are comparable to those
obtainable from unrelated parties. The leases provide for monthly payments of
$24,427 including applicable taxes. Rent expense under these leases totaled
$278,391 and $250,802 for the years ended May 31, 2006 and 2005, respectively.
The Marine division leases its facilities under three-year operating lease, with
one year option. The one year option was exercised extending the lease to
four-years expiring September 30, 2007. The monthly lease payment is $2,392,
with no change during the term of the contract. Future minimum rental payments
required under the above mentioned leases subsequent to the year ended May 31,
are as follows:

                    2007                         321,578
                    2008                         302,611
                    2009                         219,845
                                             -----------
                                             $   844,034
                                             ===========
Note 11. Long-Term Debt

Notes payable consisted of the following:
                                                         2006           2005
                                                     ------------   ------------
Bank notes, payable in monthly installments
totaling $10,566, bearing interest at rates
varying from 0.0% to 8.06%,secured by transportation
equipment, maturing at various dates through
2010.                                                $   206,189    $  134,210
Current maturities of long-term debt                (     86,938)  (    51,353)
                                                     -----------    -----------
Long-term debt                                       $   119,251    $   82,855
                                                     ===========    ===========

Aggregate maturities of notes payable for the years subsequent to the year-ended
May 31, are as follows:

                  2006                               $  86,938
                  2007                               $  62,540
                  2008                               $  43,732
                  2009                               $  11,905
                  2010                               $   1,074
                                                     ---------
                                                     $ 206,189
                                                     =========

Interest expense on notes payable amounted to $8,132 and $6,210 for the years
ended May 31, 2006 and 2005.

Note 12. Credit Arrangement

The Company has a line of credit with a bank for advances up to $500,000,
secured by the Company's accounts receivable. Interest is charged at the bank's
prime interest rate plus one percent (1%) annually. Interest is paid monthly.
The line of credit is available to fund day-to-day working capital needs.
Certain information regarding the credit arrangement as of May 31, 2006, is
summarized as follows:

Maximum amount of borrowing outstanding, at any month end $ 230,737
Minimum amount of borrowing outstanding at any month end  $    -

Interest expense related to this credit arrangement amounted to $24,031 and
$13,178 for the year ended May 31, 2006 and 2005, respectively.


                                       29
<PAGE>

Note 13. Capital Lease Obligations

Capital lease obligations consisted of the following:
                                                         2006           2005
                                                     ------------   ------------
Lease payments, payable in monthly installments
of $3,236 inclusive of imputed interest at rates
varying from 3.99% to 16.63% maturing in 2006        $   230,460    $    22,750

Current obligations under capital lease              (    84,369)   (    22,750)
                                                     ------------   -----------
Long-term obligations under capital lease            $   146,091    $         0
                                                     ============   ===========

Future minimum lease payments under capital lease for the years ended subsequent
to May 31, are as follows:

                  2006                    $ 84,369
                  2007                    $ 80,783
                  2008                    $ 51,977
                  2009                    $ 13,331
                                          --------
                                          $230,460

Interest expense recorded on capital lease obligations amounted to $13,125 and
$2,918 for the years ended May 31, 2006 and 2005, respectively, and is included
in other income and expenses.

Note 14. Accrued Liabilities

Accrued liabilities consisted of the following:
                                                         2006           2005
                                                     ------------   ------------

Compensation, related taxes, and benefits                608,335    $   336,815
Professional fees                                        188,574        133,048
Commissions                                              172,719        115,504
Other, including accrued claims                           48,625         29,124
                                                     ------------   -----------
                                                     $ 1,018,253    $   614,491
                                                     ============   ===========
Note 15.  Commitments and Contingencies

Operating Leases - The Company also leases various office equipment under
non-cancelable leases expiring at various dates through June 2008. Rent expense
under these operating leases was $12,980 in the current year and is included in
selling, general, and administrative expenses.

Currently, the Company has no automobile leases. Lease payments for year ended
May 31, 2005 totaled $23,105.

Warranty - In its normal course of business, the Company provides a one-year
warranty covering its work. The Company's policy is to expense costs, if any, in
connection with this warranty in the period such costs are incurred. In the
opinion of management, based upon prior experience, future warranty costs are
not anticipated to be material.

Prepaid Service Agreements - Air Conditioning sells prepaid service agreements,
which are primarily for a period of one year. Unearned revenues related to these
service agreements are reflected on the consolidated balance sheets as deferred
revenues.



                                       30
<PAGE>

Note 16. Segments and Related Information

The Company's three business segments have separate management teams and
infrastructures that offer different services. They are managed separately
because each business segment provides different unrelated services. The
Company's three business segments are Electric, Air Conditioning and DataTelcom.
The Company provides electrical service, repair, and maintenance of commercial
and residential facilities through Electric. Installation, service, repair and
maintenance of commercial and residential air conditioning systems are done
through Air Conditioning. DataTelcom provide installation, repair and
maintenance of wireless communications equipment.

The accounting policies of the segments are the same as those described in the
summary of significant accounting policies. All intersegment sales prices are
market based. The Company evaluates performance based on operating earnings of
the respective business units. The following segment information includes
allocations of certain costs, including overhead and shared services which are
allocated based on revenues, payroll and other factors. These agreed-upon
amounts between the segments may differ from amounts that would be negotiated in
an arms-length transaction.

Year Ended
May 31, 2006          Electric      HVAC     DataTelcom Unallocated     Total
--------------------------------------------------------------------------------
Total revenue
 earned              $9,586,340  $8,841,891  $3,238,289        -     $21,666,520
Inter-segment
 revenue                366,042      59,378      35,848        -         461,268
--------------------------------------------------------------------------------
Total external
 revenue earned      $9,220,298  $8,782,513  $3,202,441        -     $21,205,252
================================================================================
Gross profit         $2,860,427  $2,732,768  $  514,476        -     $ 6,107,671
================================================================================
Operating earnings   $  688,107  $  817,216  $ (224,963)       -     $ 1,280,360
================================================================================
Depreciation and
 amortization        $  158,784  $  117,504  $   70,823        -     $   347,111
================================================================================
Interest expense     $   11,795  $   10,022  $    2,887        -     $    24,704
================================================================================
Total assets         $3,047,448  $2,657,008  $  835,185   2,384,053  $ 8,923,694
================================================================================
Capital expenditures $  316,525  $  200,152  $    8,664  $  141,630  $   666,971
================================================================================


Year Ended
May 31, 2005          Electric      HVAC     DataTelcom Unallocated     Total
--------------------------------------------------------------------------------
Total revenue
 earned              $7,827,757  $6,445,643  $3,200,100        -     $17,473,500
Inter-segment
 revenue                364,396      38,554       8,785        -         411,735
--------------------------------------------------------------------------------
Total external
 revenue earned      $7,463,361  $6,407,089  $3,191,315        -     $17,061,765
================================================================================
Gross profit         $2,110,394  $1,628,653  $  703,621        -     $ 4,442,668
================================================================================
Operating earnings   $   81,757  $  117,430  $  132,033        -     $   331,220
================================================================================
Depreciation and
 amortization        $  190,335  $   91,170  $   72,755        -     $   354,260
================================================================================
Interest expense     $    8,091  $    7,852  $    4,071        -     $    20,014
================================================================================
Total assets         $ 4,348,613 $  828,043  $  316,863   1,182,385  $ 6,675,904
================================================================================
Capital expenditures $    97,899 $   62,385  $   19,339  $     -     $   179,623
================================================================================



                                       31
<PAGE>

Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

During the fiscal years covered by this report, we did not have a change in or a
disagreement with our accountants. We initially appointed Dohan and Company,
Certified Public Accountants, as our auditors in 1997.

Item 8a.  Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Securities
Exchange Act of 1934 reports is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms, and that such
information is accumulated and communicated to the Company's management,
including its Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. Within 90
days prior to the date of this report, the Company's management carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon the foregoing, the Company's Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures are
effective in connection with the filing of this Annual Report on Form 10-KSB for
the year ended May 31, 2006.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation, including any significant deficiencies or material weaknesses
of internal controls that would require corrective action.

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        With Sections 16(a) of the Exchange Act.

Rules promulgated by the Securities and Exchange Commission govern the reporting
of securities transactions by directors, executive officers and holders of 10%
or more of our common stock. Based solely upon our review of copies of reports
filed with the SEC and received by us, we believe that our directors and
executive officers have filed all required reports during the year-ended May 31,
2005.

Our directors and executive officers are as follows:

Director
Name                 Since         Age      Position
-----                -----         ---      --------
W. Edd Helms, Jr.    1985           60      Chairman of the Board of
                                            Directors, President and
                                            Chief Executive Officer

L. Wade Helms        1986           49      Executive Vice President, Secretary,
                                            Treasurer and Director

Dean A. Goodson      2003           38        Chief Financial Officer

Joseph M. Komarmy    1984           59      Vice President

Walter Revell**      2002           71      Independent Director

Edward McCarthy*     2002           62      Independent Director

* Designates member of the audit and compensation committees of the Board of
Directors.

** Designated as a financial expert and member of the audit and compensation
committees of the Board of Directors



                                       32
<PAGE>

W. Edd Helms, Jr., since 1985, has been our Chairman of the Board of Directors,
President, and Chief Executive Officer. Edd Helms is also the President of Edd
Helms Air Conditioning, Inc., Edd Helms Marine Air Conditioning & Refrigeration,
LLC., and Datatelcom, Inc. Edd Helms served as the Chief Financial Officer until
March 2005. Prior to the merger of Edd Helms Incorporated with and into the
Hotelecopy, Inc. ("Merger"), Edd Helms was the President and Director of Edd
Helms, Incorporated. Edd Helms graduated in 1968 from the Joint Apprenticeship
Program of the National Electrical Contractors Association and International
Brotherhood of Electrical Workers. Edd Helms is the brother of L. Wade Helms.

L. Wade Helms has been our Executive Vice President, Secretary, Treasurer, and
Director since the Merger. From February 1986 until the effective date of the
Merger, Mr. Helms served in the capacity of Executive Vice President and a
Director of Hotelecopy. From 1983 to 1986, he was the Chief Financial Officer
and Vice President of Edd Helms, Incorporated and he served as a Director of Edd
Helms, Incorporated from 1984 until 1990. Wade Helms graduated in 1979 from
Florida State University with a Bachelors Degree in Economics

Dean A. Goodson has been our Chief Financial Officer since March 2005. From May
2003 until March 2005, Mr. Goodson was our Controller. From 1999 until 2003 he
was employed by a variety of companies with responsibilities ranging from ERP
system implementations to corporate mergers and acquisitions. From 1992 until
1999 he was employed at Rinker Materials Corporation with his last position
being Field Controller. From 1991 to 1992 he was employed at Tri-City Electric
as a Staff Accountant. Dean Goodson graduated in 1991 from Florida International
University with a Bachelors Degree in Accounting.

Joseph M. Komarmy has been our Vice President since the merger. Mr. Komarmy was
Vice President of Edd Helms, Incorporated since 1984. He served as a Director
from April 5, 2002 until March 1, 2005.

Mr. Revell has been Chairman of the Board and CEO of H. J. Ross Associates,
Inc., a consulting engineering, planning and environmental firm in Coral Gables,
Florida, since 1991, and also Chairman and CEO of Revell Investments
International, Inc., since 1984. He was President, CEO and a Director of Post,
Buckley, Schuh & Jernigan, Inc. from 1975 to 1983 after serving as Secretary of
Transportation for the State of Florida from 1972 to 1975. Mr. Revell is a
Director and Chairman of the Audit Committee of The St. Joe Company, and a
Director of Rinker Materials and other closely-held companies. He is Chairman of
the Greater Miami Foreign Trade Zone and also Chairman of the Florida Energy
2020 Study Commission by appointment of Governor Jeb Bush.

Edward J. (Ted) McCarthy is currently Vice President and General Manager of
William Lehman Leasing Corporation, a position he has held since 1976. William
Lehman Leasing is a 32 year old company associated with the William Lehman
Dealership Organization. Mr. McCarthy has been with leasing since 1973. He has
also served as Vice President and General Manager of William Lehman Dodge from
1985 to 1987 and Vice President and General Manager of William Lehman Isuzu,
Suzuki, and Subaru from 1991 to 1999.

Directors are elected to hold office until the next Annual Meeting of
Shareholders and until their respective successors are elected and qualified.
Our officers are elected by the Board of Directors at the Annual Meeting and
hold office for the term of one year and until their successors are elected and
qualified.

Our By-Laws contain provisions that permit indemnification, including legal
fees, of our directors, officers, employees, and agents to the fullest extent
permitted by Florida law.



                                       33
<PAGE>

Code of Ethics

The Board of Directors (the "Board") of Edd Helms Group Inc. has adopted this
Code of Ethics (the "Code"). The Code applies to the Company's principal
executive officer, principal financial officer, and to persons performing
similar functions, and is intended to qualify as a "code of ethics" within the
meaning of Section 406 of the Sarbanes-Oxley Act of 2002, and the rules and
regulations promulgated hereunder.

The Code is designed to deter wrongdoing and to promote (i) honest and ethical
conduct, including the ethical handling of actual or apparent conflicts of
interest between personal and professional relationships, (ii) full, fair,
accurate, timely and understandable disclosure in Securities and Exchange
Commission ("SEC") filings and in other public communications made by the
Company, (iii) compliance with applicable governmental laws, rules and
regulations, (iv) prompt internal reporting to the Board of violations of the
Code and (v) accountability for adherence to the Code.

The Board believes the Code should be an evolving set of conduct and ethics,
subject to alteration as circumstances warrant. Any modifications to or waiver
from the Code may be made only by the Board. The Board will promptly disclose
changes to and waivers from this Code as required by applicable law, including
the rules and regulations promulgated by the SEC.

The Code does not cover every issue that may arise, but it sets out basic
principals to guide officers. EACH OFFICER'S FULL COMPLIANCE WITH THE CODE IS
MANDATORY.

1.  Ethical Conduct and Ethical Handling of Conflicts of Interest

Each Officer is expected to conduct his or her affairs with uncompromising
honesty and integrity. Each Officer is required to adhere to the highest moral
and ethical standards in carrying out their duties on behalf of the Company. A
Officer of the Company is expected to be honest and ethical in dealing with all
employees of the Company and third parties.

Each Officer is expected to avoid engaging in activities that conflict with, or
are reasonably likely to conflict with, the best interests of the Company and
its stockholders. Any personal activities, interests or relationships of a
Officer that would or could negatively influence his or her judgment, decisions
or actions to a material extent, or give rise to the appearance of such negative
influence, must be disclosed to the Board or its designee, who will (in
consultation with the Board, if appropriate) determine if there is a conflict
and, if so, how to resolve it without compromising the Company's interests.
Prompt and full disclosure is always the correct first step towards identifying
and resolving any potential conflict of interest or problem. Conflicts of
interest will be reviewed by the Board taking into account the particular
circumstances in the context of the Officer's activities with the Company. In
certain limited cases, activities or relationships giving rise to potential
conflicts of interest may be permitted if the Board determines that they are not
to be harmful to the Company. If you have any doubt about whether a conflict of
interest exists, please contact the Company's legal advisors so that they can
help make that determination.



                                       34
<PAGE>

2. Full, Fair, Accurate and Timely Disclosure for SEC Filings

The Company requires honest and accurate recording and reporting of information
in order to make responsible business decisions. All of the Company's books,
records, accounts and financial statements must be maintained in reasonable
detail, must promptly, completely and accurately reflect the Company's assets,
liabilities and transactions and must conform both to applicable legal
requirements and to the Company's system of internal controls. Unrecorded or
"off the books" funds or assets should not be maintained unless permitted by
applicable laws, rules or regulations. In addition, no undisclosed or unrecorded
fund or asset shall be maintained for any purpose and no transaction shall be
carried out in a manner such that the substance of the transaction is obscured,
nor shall any transaction be recorded improperly. If a mistake in any
information previously disclosed is discovered, such mistake should immediately
be brought to the attention of the Audit Committee of the Board and, if
applicable, the Company's independent auditors or legal advisors.

3. Compliance With Laws, Rules and Regulations

The business of the Company is to be conducted in accordance with applicable
domestic and foreign laws and in accordance with the highest ethical standards
of business conduct. Obeying the law, both in letter and in spirit, is the
foundation on which the Company's ethical standards are built. Each Officer must
respect and obey the applicable domestic and foreign laws of the jurisdictions
in which we operate. If a law conflicts with a policy in this Code, you must
comply with the law; however, if a local custom or policy conflicts with this
Code, you must comply with this Code.

4. Reporting Any Illegal or Unethical Behavior or Accounting or Auditing
   Concerns

Officers shall consult with the Audit Committee of the Board (i) about observed
illegal or unethical behavior and/or violations of the Code, (ii) about observed
accounting or auditing concerns and/or (iii) when in doubt about the best course
of action in a particular situation. It is the policy of the Company not to
allow retaliation for reports of misconduct by others or of accounting or
auditing concerns, in each case, made in good faith by employees. Officers are
expected to cooperate in internal investigations of misconduct. If you observe
or become aware of illegal or unethical behavior, violations of the Code or
accounting or auditing concerns, you should report the behavior immediately to
the Board. To the extent the matter has been reported and remains unresolved,
you should report the matter to the Company's Audit Committee and its legal
advisors.

5. Accountability for Adherence To The Code

Those who violate the standards in the code will be subject to disciplinary
action. Disciplinary action may include loss of pay, termination, referral for
criminal prosecution and reimbursement to the company or others for any losses
or damages resulting from the violation of this code, you must contact the
company's audit committee as soon as practical.

6. Waivers of The Code

A waiver of, or amendment to, the Code may be made only by the Board and will be
promptly disclosed as required by law, including the rules and regulations
promulgated by the SEC.



                                       35
<PAGE>

Item 10. Executive Compensation.

I.  Summary Compensation Table

The following table sets forth certain information regarding compensation paid
during each of the last three fiscal years to our executive officers. We have no
employment agreements with any officers or employees.

Directors who are our employees do not receive additional compensation for
serving as directors. Non-employee directors receive $2,500 for each Board
meeting attended in person and $500 for each Board Meeting attended by
telephone. Upon first becoming a director, each non-employee director received
options under the non-qualified Stock Option Plan to purchase 10,000 shares of
common stock.

All of our directors are reimbursed for out-of-pocket expenses incurred in
attending meetings of the Board of Directors or committees thereof, and for
other expenses incurred in their capacity as directors.

--------------------------------------------------------------------------------
Annual Compensation                       Long-Term Compensation
----------------------------------------- --------------------------------------
                                          Awards                 Payouts
----------------------------------------- ---------------------- ---------------
   (a)         (b)  (c)    (d)   (e)      (f)         (g)       (h)      (i)
------------- ---- ------ ----- ------ ---------- ----------- ------- ----------
Name and      Year Salary Bonus  Other  Restricted Option/SARs LTIP    All Other
Principal                 Annual Stock                        Payouts comp.(inc.
Position                  Comp   Awards                                cars)
------------- ---- ------ ----- ------ ---------- ----------- ------- ----------

W. Edd Helms, 2006 $186,961 $5,000                                     $12,258
Jr.           2005 $206,313                                            $  -
              2004 $250,000                                            $  -
President and
Chief
Executive
Officer
------------- ---- ------ ----- ------ ---------- ----------- ------- ----------

L. Wade Helms 2006 $128,942 $5,000                                     $11,011
              2005 $92,490                                             $20,044
              2004 $95,004  $3,000                                     $21,122
Executive Vice
President
------------- ---- ------ ----- ------ ---------- ----------- ------- ----------

Joseph M.     2006 $98,292 $40,329                                     $23,385
Komarmy       2005 $96,802                                             $23,770
              2004 $106,121 $3,000                                     $24,561
Vice
President
------------- ---- ------ ----- ------ ---------- ----------- ------- ----------

Equity Compensation Plan Information



                                       36
<PAGE>

The following table summarizes share information about Edd Helms Group equity
compensation plans including the 2001 Incentive Stock Option Plan and the 2001
Non-qualified Stock Option Plan. Both of these plans have been approved by our
shareholders.

                                                            Number of securities
              Number of securities                       remaining available for
                      to be issued    Weighted-average     future issuance under
                  upon exercise of   exercise price of equity compensation plans
              outstanding options, outstanding options,    (excluding securities
Plan category  warrants and rights warrants and rights   reflected in column (a)

                    (a)                     (b)                (c)
2001 Incentive
stock option
plan for
officers and
key employees     400,000                   0.15             1,100,000

2001 Non-qualified
stock option plan
to enable certain
directors, employees
and consultants to
acquire or expand
propriety interest
our Company        20,000                   0.21               230,000

Equity compen-
sation plans not
approved by
security holders     NONE                    NONE                 NONE

Total             420,000                                    1,330,000

Item 11. Security Ownership of Certain Beneficial Owners, Management and Related
Stockholder Matters.

The following table sets forth, as of September 8, 2006, information with
respect to:

  (a) any person known to us to be the beneficial owner of five percent or more
        of the outstanding shares of our common stock,
  (b) each of our directors and our executive officers, and,
  (c) all of our directors and executive officers as a group.



                                       37
<PAGE>

For computing the percentage of the shares of our common stock owned by each
person or group listed in this table, any shares not outstanding, which are
subject to options or warrants exercisable within 60 days have been deemed
outstanding. Except as otherwise indicated below, we believe each of the persons
named below to possess sole voting and investment power with respect to the
shares of our common stock beneficially owned by such person.

                           Amt. Of Beneficially
      Name                     Owned Common Stock              Percent
-------------------        -------------------              -------
W. Edd Helms, Jr.               10,065,814              80.00%   (1)(9)
L. Wade Helms                       54,876                .43%      (2)
Joseph M. Komarmy                  120,458                .95%      (3)
Carol Helms                      9,343,539              74.30%   (4)(9)
Walter L. Revell                    25,935                .20%      (5)
Edward McCarthy                      2,580                -         (6)
ESOP                             1,167,055               9.28%      (7)
All officers and directors      10,269,663              81.11%      (8)

The address of all four of our officers is: 17850 N.E. 5th Ave, Miami, Florida
33162.

(1) This includes 9,277,934 shares held as a joint tenant with his wife Carol
Helms, 517,177 shares in his name, and 270,703 shares attributed to him due to
his percentage ownership of our ESOP, which holds 1,159,970 shares of our common
stock.

(2) This includes the 2,147 shares held as joint tenants with his wife, 500
shares in his name, 50,000 shares issued in January of 2002, and 2,229 shares in
the ESOP. This does not include stock option to acquire 200,000 shares of our
stock pursuant to our incentive stock plan at a purchase price of $.15 which
options will expire in 2011.

(3) This includes 50,000 shares issued in January of 2002, and 70,458 shares in
the ESOP. This does not include an option to acquire 200,000 shares of our stock
pursuant to the our incentive stock option plan at a purchase price of $.15
which options will expire in 2011.

(4) This includes 9,277,934 shares held as a joint tenant with her husband, Edd
Helms, 65,605 shares attributed to Mrs. Helms due to her percentage ownership of
our ESOP.

(5) Walter L. Revell has sole voting and investment power of these shares. This
does not include 10,000 nonqualified stock options awarded April 5, 2002.

(6) Edward McCarthy shares voting and reinvestment power of these shares with
his wife. This does not include 10,000 nonqualified stock options awarded April
5, 2002.

(7) The ESOP was adopted by Edd Helms, Incorporated on May 15, 1995, and at the
time of the merger was funded with 638 shares of the common stock of Edd Helms,
Incorporated. As a result of the merger with Hotelecopy, the ESOP received
1,378,781 of our shares of common stock. Since the merger, 218,811 shares have
been distributed from the ESOP so that as of May 31, 2006, the ESOP held
1,159,970 shares.

(8)      See notes 1-6 for the details.

(9) For purposes of the percentage calculations, the shares held in common by
Edd and Carol Helms are included in the percentage ownership of each of them.

Item 12. Certain Relationships and Related Transactions

We lease our office and warehouse facilities from a partnership owned by W. Edd
Helms, Jr. and Carol Helms. See Item 2 "Description of Property".

We believe that the above transaction is on terms and conditions at least as
favorable to us as those that would have been available from non-affiliated
third parties. Any future transactions between us and our officers, directors or
principal shareholders or any affiliates will be made for bona fide business
purposes on terms no less favorable than could be obtained from unaffiliated
third parties, and will be approved by a majority of the Board of Directors.




                                       38
<PAGE>

Item 13. Exhibits and Reports on Form 8-K.

a. Exhibits required to be filed by Item 601 of Regulation S-B:

31.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer

32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer


b. No Form 8-K was filed during the last quarter of the period covered by this
   report.


Item 14. Principal Accountant Fees and Services

Audit Fees

Dohan and Company, CPA's, billed $126,945 for professional services rendered for
the audit of our annual financial statements for fiscal year 2005 and the
reviews of the financial statements included in our Forms 10-QSB for that fiscal
year. For fiscal year 2006, the amount billed or accrued for the same services
is expected to be $116,188.

Tax Fees

Dohan and Company, CPA's, billed $6,869 for fiscal year May 31, 2005, for
professional tax services and is expected to bill approximately $7,000 for
fiscal year ended May 31, 2006.

The above audit fees were pre-approved by the audit committee based on estimated
budgets presented to the audit committee.


                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                          /s/ EDD HELMS GROUP, INC.
                                          -------------------------
                                              (Registrant)

                                       By:/s/ W. Edd Helms, Jr.
                                          -------------------------
                                          W. EDD HELMS, JR.
                                          PRESIDENT AND CHIEF EXECUTIVE OFFICER

                                       Date: October 15, 2006

In accordance with the Exchange Act, this report has been signed on the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

                                       By:/s/ W. Edd Helms, Jr.
                                          -------------------------
                                          W. EDD HELMS, JR.
                                          PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                          AND DIRECTOR


                                       By:/s/ L. Wade Helms
                                          -------------------------
                                          L. WADE HELMS
                                          EXECUTIVE VICE PRESIDENT, SECRETARY,
                                          TREASURER AND DIRECTOR


                                           By:/s/ Walter Revell
                                          -------------------------
                                          WALTER REVELL
                                          DIRECTOR


                                          By:/s/ Edward McCarthy
                                          -------------------------
                                          EDWARD MCCARTHY
                                          DIRECTOR


                                       Date: October 15, 2006

                                       39
<PAGE>